Originally posted by BrilloPad
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LF Equity Income (Woodford)
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Originally posted by amanwhoisquiet View PostJust had an email off my pals at HL about this.Public Service Posting by the BBC - Bloggs Bulls**t Corp.
Officially CUK certified - Thick as f**k.Comment
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Originally posted by jamesbrown View PostHe had too many punts in risky and/or illiquid companies, particularly small companies, and it got riskier over time. It was mismanaged or, at least, not as advertised. I feel bad for those who invested a lot and thought it was a comparatively safe bet.
Among others, the Eddie Stobart thing was a disaster. Every stock picker gets some wrong. He just saved all of his wrong choices up and got them all in during a 3-4 year period. By not having any of them earlier, he looked spectacularly good. By stringing them all together, he looks spectacularly bad. By continuing to take his fees while his investors were locked in, he looks immoral.Comment
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Originally posted by WordIsBond View PostHe was also betting heavily on Brexit and the Brexit delay pretty much sealed his fate. Probably wouldn't have recovered anyway, but that was the final nail in the coffin.
Among others, the Eddie Stobart thing was a disaster. Every stock picker gets some wrong. He just saved all of his wrong choices up and got them all in during a 3-4 year period. By not having any of them earlier, he looked spectacularly good. By stringing them all together, he looks spectacularly bad. By continuing to take his fees while his investors were locked in, he looks immoral.Comment
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Originally posted by BrilloPad View PostI was under the impression he has too many long term assets and was unlucky to have too many people wanting redemptions at once?
It was a very illiquid fund where the customers were able to get their money back same day. One run on the fund and it's dead as a dodo.
What's likely to happen is a change in the regulation around funds that can be withdrawn from quickly, having to have a lot more liquid assets. They'll then have less yield.
Golden rule.... if anything offers more than 5% growth there are risks (correct at time of writing).See You Next TuesdayComment
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Originally posted by Lance View PostIt was a very illiquid fund where the customers were able to get their money back same day. One run on the fund and it's dead as a dodo.
What's likely to happen is a change in the regulation around funds that can be withdrawn from quickly, having to have a lot more liquid assets. They'll then have less yield.
Everything else you said is right. If someone wants a fund like this it should be an investment trust, not an OEIC.Comment
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Originally posted by WordIsBond View PostUnless they have more yield because they have fewer bad bets. Last sentence is dubious, you know.
My point being that anything that claims more growth than you get in a high interest savings account comes with risks. And the higher growth that's claimed the greater the risk.
As for Woodford.... Is has been proven time and time again that past performance is no indictaor of future performance. So quite why the superstar investors exist is beyond me.See You Next TuesdayComment
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Originally posted by Lance View PostSo quite why the superstar investors exist is beyond me.Comment
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Originally posted by Lance View PostI was driving at liquid assets generally being low growth investments. Cash being the most liquid.
Woodford's problem was he had a lot of stuff that wasn't publicly traded, so he couldn't necessarily sell them in a hurry even if he cut the price. The companies might have been valuable, but he couldn't get cash when he needed it for what he owned.Comment
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Originally posted by jamesbrown View PostI think you'd have a tough time arguing that Warren Buffett wasn't a superstart investor,
Neil Woodford did two things wrong. Firstly he flouted the regulations and sold a hedge-fund-like play as an everyman retail product. The investments were specially risky and wouldn't sensibly support on-demand withdrawals. Secondly he tried to pick really promising stocks. It looks as though he just got those plain wrong. It may be he didn't probe enough or wasn't clever enough or it may just be your chances of out-thinking the market are vanishingly small."Don't part with your illusions; when they are gone you may still exist, but you have ceased to live" Mark TwainComment
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